“SolarCity is in dire need of cash. It’s already gotten two bridge loans from Tesla and it needs this deal to go through,” said Gordon Johnson, an Axiom senior analyst, told Real Money this week. Axiom, in its June 28 report on SolarCity, estimated the company wasquickly burning through its cash and would likely fall to near zero, or $1.4 million, by the fourth quarter. As a result, some Wall Street watchers have been whispering the “bankruptcy” word as it relates to SolarCity.Read more "2 Reasons SolarCity May Be Headed for a Power Failure"
- You’ve not met Aswath Damodaran? Allow me to introduce you.
- Damodaran lays bare the many follies & misdeeds behind the TSLA-SCTY fairness opinions.
- In the Tesla fairness opinion kitchen, Goldman Sachs wrote the recipe, furnished the ingredients, and supplied the spoon; Evercore and Lazard merely stirred the pot.
- Goldman Sachs has been consistently wrong in forecasting Tesla performance, and (very quietly) already has slashed the 2017 revenue forecast it gave Evercore and Lazard.
- Ben Kallo stops by with an important reminder for us all.
Jim Chanos called Tesla Motors’ proposed merger with SolarCity”crazy” and “the height of folly” while outlining his short positions in the stocks on Tuesday.
The short-seller from Kynikos Associates estimated the combined company would burn through $1 billion per quarter and “constantly need access to capital markets.” He described SolarCity’s business model as “just plain uneconomic.”Read more "This shows why Tesla-SolarCity is a ‘crazy’ merger, Jim Chanos says"
- Tesla’s revolving credit lenders want no part of SolarCity.
- They won’t allow Tesla to guarantee any SolarCity debt, and they’ve made it difficult for Tesla to downstream borrowed funds.
- What? You didn’t know that? I’m not surprised; Tesla did its best to hide those facts.
- The recent SolarCity bond offering is a new low - huge red flags, and tremendous potential for more insider looting.
- But first, a quick look at the Tesla fire sale in progress. Get an extra $1,000 savings on your new Tesla at the link I provide. (You’re welcome!).
Elon Musk‘s trying to save his legacy off the backs of Tesla shareholders … so claims a Tesla shareholder who’s suing the icon.
The shareholder claims Elon’s move to infuse his failing SolarCity with $2.6 billion of Tesla stock is outrageous, self-involved and irresponsible.
According to the docs … Elon’s trying to run Tesla like a privately held company, moving money around not because it’s right for the car company but to build his own legacy of changing the world.
The lawsuit claims Elon doesn’t have his eye on the ball … that Tesla itself is operating in the red, burning cash, and he should focus on building electric cars. The stockholder calls Elon’s obsession with SolarCity “a dangerous distraction.”
The shareholder says SolarCity is a stinker … the company went on the auction block recently and didn’t attract a single bidder.Read more "Tesla Shareholder Sues … DON’T BURN OUR MONEY TO SAVE YOUR CRAPPY SOLAR CO."
With SolarCity owing money to SpaceX — Musk’s unlisted rocket developer — and insiders, and Tesla needing cash itself, the electric-vehicle maker’s highly valued shares are critical. In a rational world, holders of those shares would consider SolarCity’s wide discount alongside the fact that, despite this apparent bargain, no other bidders have emerged, and conclude Tesla is clearly overpaying and they should vote the deal down.
One twist they have to contend with, though, is that, in the absence of near-term profits, the value of Tesla’s stock is inextricably bound up with belief in the abilities and vision of Musk himself. While the decision to buy SolarCity may have dimmed that aura somewhat, a potential collapse at SolarCity if the deal doesn’t go through could be even more damaging — one of those damned if you do, damned if you don’t situations. Nothing is simple once you’ve entered the Muskplex.Read more "That SolarCity Spread Spells Trouble For Tesla"